Market Insight

Apple Conjures More Success With the “Identical” but Innovative iPhone 6S

September 08, 2015

Wayne Lam Wayne Lam Principal Analyst, Mobile Devices & Networks

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New iPhone 6S and 6S Plus, which feature numerous innovations despite appearing the same:

- 3D Touch, a new name for force touch technology previously used on Apple Watch
- The new A9 processor: 70% faster on CPU tasks, 90% faster on graphics, and integrates the M9 motion sensor
- A new faster Touch ID sensor
- 12MP rear camera, with a faster autofocus, and the ability to record 4K video.
-  A 5MP front camera with the ability to blip the iPhone's screen for a "Retina flash" effect when taking selfies.
- "Live Photos" where the iPhone animates still photos when the user force touches the display.
- A new Aluminum material for the case and are also available in rose gold.

Apple also announced:
- An 12.9" iPad Pro with a new A9X chip which has CPU performance 1.8 times as fast as the A8X in the iPad Air 2.
- A new Apple TV with support for third party apps for the first time, leveraging iOS developers.
- New Apple Watch strap designs, new Watch finishes, and confirmed Watch OS 2.0 (which enables native third party apps) will be available on September 16.
- Greater storage options for iCloud to store the higher quality photos and videos captured by the new iPhone 6S.


Our analysis

With the iPhone 6S, Apple has introduced many more innovations than it added with last years' iPhone 6 and 6 Plus. Apple has performed the ultimate conjuring trick: Change everything about the iPhone, but make it look almost identical to the old model, bar the new rose gold color option.

The "off years" where Apple keeps the external look and feel unchanged have included some of the greatest iPhone innovations, despite the appearances to the contrary. For example, the Siri voice assistant launched alongside the iPhone 4S, while the Touch ID sensor and first smartphone 64 bit processor premiered on the iPhone 5S. Apple uses the more powerful components to enable new experiences and build on the iPhone's appeal.

This year followed the pattern. If Intel has tick tock, then Apple has its own cycle, and one where every iPhone release pushes Apple's business forward whether or not the iPhone appears different.

The most important new feature on the 6S is 3D Touch because it will increase the uniqueness of iPhone apps. The new name for force touch will enable new user interface options in Apple's built-in apps and enable better control of mobile games. As a distinct iPhone feature, games and apps which take advantage of 3D Touch will be harder to port to competing Android smartphones which will increase the differentiation of the iPhone and the wider iPhone ecosystem of third party apps.

The 3D Touch improvements will give existing iPhone owners an important reason to upgrade. As their existing apps are updated with 3D Touch, third party app developers will market the improvements to their apps which will help Apple communicate the benefits of the iPhone 6S, without Apple having spend anything on advertising or marketing.

The new iPhone 6S camera leverages the much faster processing power of the A9 chipset to offer both 4K video recording and ‘Live Photos’ which are created using an extremely fast burst to record photos before and after the actual capture moment, as well as a snippet of audio. This idea is far from new: Both Nokia and HTC have implemented similar features, but Apple’s integration with 3D Touch and the use of Apple Photos to enable back-up and cross device cloud sharing makes the Apple implementation far more elegant.  

The iPhone has been the engine of Apple's financial and ecosystem strength in recent years. Apple needs the iPhone to continue to succeed because its newer products are not yet delivering remotely comparable financial returns: Direct iPhone revenues represent over 60% of Apple's total revenues.

Also, the iPhone has established the foundation for wider iOS device success. The Apple App Store for iOS has enabled Apple to build relationships with 11 million developers which have enabled Apple Watch, iPad and now the new Apple TV to deliver a wide range of services because all share a common iOS code base and very similar developer tools.

Fortunately for Apple, the new iPhone 6S inherits extremely strong momentum from its almost year old predecessor. The old iPhone 6 and 6 Plus continued to sell well even in a season which is normally the iPhone’s weakest. In the second calendar quarter of 2015, Apple shipped 47.5m iPhone units, up 35% year on year while also raising iPhone average selling price by 18%.

As a result of the extensive improvements included in the iPhone 6S, and the strong shipments of old models in the immediate prior quarter, IHS forecasts Apple will ship 236m iPhones in 2015, up 23% year on year. The magic of the iPhone business will continue to drive Apple and make it possible to establish the new product ranges Apple needs to be secure in the long term.

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